Asian markets drift lower ahead of EU summit

By KELVIN CHAN, AP Business Writer
| 8:29 p.m.June 24, 2012

A woman speaks on a mobile phone in front of a securities firm's electronic stock board in Tokyo Monday, June 25, 2012. Asian stocks mostly drifted lower Monday as investors grew cautious ahead of a critical European Union summit later this week where Greek leaders will attempt to renegotiate some terms of the country's international bailout. Japan's Nikkei 225 index was 0.4 percent lower at 8,765.54. (AP Photo/Shizuo Kambayashi)
— AP

A woman speaks on a mobile phone in front of a securities firm's electronic stock board in Tokyo Monday, June 25, 2012. Asian stocks mostly drifted lower Monday as investors grew cautious ahead of a critical European Union summit later this week where Greek leaders will attempt to renegotiate some terms of the country's international bailout. Japan's Nikkei 225 index was 0.4 percent lower at 8,765.54. (AP Photo/Shizuo Kambayashi)
/ AP

HONG KONG 
Asian stocks mostly drifted lower Monday as investors grew cautious ahead of a critical European Union summit later this week where Greek leaders will attempt to renegotiate some terms of the country's international bailout.

Investors are plagued by twin worries over an economic slowdown in China, the world's second biggest economy, and a debt crisis in Europe that seemingly has no end.

"Market sentiment is weighed down by a weakening Chinese economy and also the European debt crisis," said Louis Wong, a director Phillip Securities.

Investor pessimism about the state of the world economy prevailed even as the leaders of France, Germany, Italy and Spain agreed over the weekend to push for a growth package worth up to (EURO)130 billion ($163 billion) at the European Union summit scheduled for June 28-29 in Brussels.

The proposal was "predictably vague, lacking details on content and financing and thus was given scant regard," Stan Shamu of IG Markets in Melbourne said in a market commentary.

The summit, aimed at kick-starting the economy and safeguarding the currency bloc, will prove a key test of Greek leaders' pledges to loosen the terms of the country's bailout. Greece's new government said on the weekend it would seek to repeal some taxes, halt layoffs and extend a deadline for tough austerity measures by two years. But Germany, the biggest single contributor to the bailout, says Athens must stick to the current targets.

Previous summits and meetings have failed to deliver a "credible set of solutions to the Eurozone crisis," strategists at Credit Agricole CIB said, so "markets are likely to remain relatively range bound ahead of the summit."